Pennsyvlania lets Turnpike bidders raise offers

NEW YORK, May 12 (Reuters) - Pennsylvania gave companies that bid within 10 percent of the highest price for a 75-year lease for its Turnpike until Friday to submit a best and final offer, a spokesman for Gov. Ed Rendell said on Monday.

The Democratic governor plans to announce on Monday which company won the bid for the heavily traveled 531-mile highway, but the legislature would have to approve the deal and it previously has rejected such proposals.

Spokesman Barry Ciccocioppo did not release any names of the bidders or say how large an upfront payment they offered.

Though such long-term leases are prevalent overseas, similar plans have stalled in a number of states, from Texas to New Jersey, over concerns that the deals failed to protect taxpayers.

Such public-private partnerships give developers or banks that raised funds to invest in these projects, the right to collect the tolls though they must pay for the upkeep or expansions. But some fiscal monitors say these types of long-term leases should only be used for new roads, not existing ones.

If approved, Pennsylvania's bidders would not be able to raise tolls faster than the annual inflation rate or 2.5 percent a year, and an independent auditor would do yearly checks to ensure the road is maintained at least as well as its current condition, the Rendell spokesman explained.

The Turnpike is one of the state's main east-west arteries, and the spokesman added Rendell revived the lease proposal after opposition surfaced to adding tolls on Interstate 80.

The plan to make motorists pay tolls on Interstate 80, the Turnpike's east-west main competitor, is awaiting the federal government's approval, the spokesman added.